Let’s push this further toward the theoretical extreme. Suppose energy became one million times cheaper (and thus people could turn on a million times more miners—a million times the current hashrate for the same electricity cost). The difficulty would simply adjust to make it a million times harder to find a block. So why would the price plummet if the supply stays the same?

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Because the price of everything else would dump, and bitcoin just measures “everything else” Would take a LOOOOONG time for a Jevon’s paradox of that magnitude to rebalance